By Sara SjÃ¸lin, MarketWatch NEW YORK (MarketWatch) -- Investors are likely to focus on earnings and the U.S. debt ceiling in the coming week as the deadline for raising the nation's borrowing limits approaches and Washington wrangles over a major budget deal. "It's all about the debt ceiling debate in Washington," said Scott Armiger, portfolio manager at Christiana Trust. Late Friday, President Barack Obama called congressional leaders to an emergency Saturday morning meeting as talks for a comprehensive deficit-cutting plan broke down. The Obama administration says the $14.3 trillion U.S. debt ceiling needs to be raised by Aug. 2 to avoid a debt default, and Standard & Poor's has warned the U.S. must make major cuts to its debt levels to prevent a downgrade of its rating. The peak of the quarterly earnings season will also attract investor attention, with upcoming results likely to support stocks, according to fund managers and strategists. "Earnings have so far come in better than expected and I think the trend will continue into next week," said Dan Greenhaus, chief global strategist at BTIG Group in New York . Among companies that are scheduled to release earnings in the week ahead are oil giants Chevron Corp.(CVX), Valero Energy Corp. (VLO) and Exxon Mobil Corp.(XOM), along with Netflix Inc.(NFLX), Lockheed Martin Corp.(LMT), Ford Motor Co.(F), Boeing Co. (BA) and Amazon.com Inc. (AMZN). Companies listed in the S&P 500 Index (SPX)are expected to increase earnings 9.2% during the second quarter, according to Thomson Reuters Research. Earnings would rise 15.2% excluding Bank of America Corp. (BAC) , which took a $8.8 billion loss related to charges from cleaning up its mortgage portfolio. In the coming week, 180 companies in the index are expected to report earnings. According to a report from Thomson's StarMine division, which analyzes stock research ratings, Cliffs Natural Resources Inc.(CLF) and Consol Energy Inc. (CNX) are more likely to beat expectations. Assurant Inc. (AIZ) and ConocoPhillips (COP) are more likely to post a negative surprise, according to StarMine. "This week and next week are the biggest weeks for earnings reports and by the end of next week we'll know how the earnings season has been," said Bill Stone, chief investment strategist at PNC Asset Management Group . "If the earnings continue to come in like they have done so far, the markets will go up," he added. Of the 143 companies in the index that have released earnings so far, 75% reported earnings above analyst's expectations, with Apple Inc. (AAPL) and International Business Machines Corp. (IBM) at the top end of positive surprises. "Apple seemed to me as a genuine surprise, because it wasn't just beating estimates with a penny," said Bill Ryder, director of quantitative strategies at Riverfront Investment Group. Apple reported earnings of $7.79 a share, beating estimates of $5.80 a share, according to Thomson Reuters. Weekly gains The major stock indexes ended Friday's low-volume session with a loss for the Dow average and a 0.9% gain for the Nasdaq Composite (RIXF). Weekly gains were more even. Helped by positive housing-start data and an agreement on a new aid package for Greece, the S&P 500 Index (SPX) was up 2.2% on the week, the Dow Jones Industrial Average (DJI) gained 1.6% and the Nasdaq Composite rose 2.5%. "Europe is the biggest story this week. We got some clarity and the Europeans are still increasing willingness to deal with the problem. News of a deal was positive for the market and the general position to take on more risk," Greenhaus said. Just before the closing bell Thursday, the European Council said that the EU member states agreed to provide 109 billion euros ($156.7 billion) in official support to Greece and that the maturity of future loans for Greece was extended to a maximum of 30 years from the current 7.5 years. and The long-awaited summit in Brussels to contain the debt crisis from spreading further overshadowed some of the macroeconomic highlights of the week, including the applications for U.S. jobless benefits, which jumped to 418,000 from 408,000. "That is one of the real numbers that matters. But the market totally ignored it, because of Greece and rumors of a deficit deal in the U.S.," Armiger said. However, housing starts supported the stock market early in the week, as data from the Commerce Department showed a 14.6% increase, the highest level since January. In the week ahead, focus will stay on the political maneuvering over the U.S. debt ceiling and steal attention from macroeconomic data until a deal is finalized. Debt ahead Late Friday, President Obama said House Speaker John Boehner (R., Ohio) had walked out of negotiations on the deficit and debt ceiling. "If they hammer out a deal, the big thing next week will the GDP data on Friday," Armiger said. The U.S. gross domestic product for second quarter is expected to show a 1.6% growth, compared to a 1.9% growth in first quarter, but the potentially low GDP data is not expected to wipe out gains in the market next week. "I don't expect a horrible reception, because the market has already built it in," Stone said, and added that it is more likely that stocks will rise on the report. Investors will look at Japanese industrial production data on Thursday, which is expected to show a 4.5% increase, compared with a 15.5% decline in March, the month the earthquake stunned Japan's economy, Stone said. "By and large I expect underlying fundamentals to be good next week if extraneous factors will get out of the way," he added.